Laurens v. Volvo Cars of North America, LLC et al

Filing 60

MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 11/8/2017:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

XAVIER LAURENS and KHADIJA
LAURENS, Individually and on
Behalf of All Others
Similarly Situated,
Plaintiffs,
Case No. 16 C 4507
v.
Judge Harry D. Leinenweber
VOLVO CARS OF NORTH
AMERICA, LLC, a Delaware
Limited Liability
Corporation, and VOLVO CAR
USA, LLC, a Delaware Limited
Liability Corporation,
Defendants.

MEMORANDUM OPINION AND ORDER
I.

BACKGROUND

As described by the Seventh Circuit Court of Appeals, “[t]his
case,

at

base,

expectations.”

is

about

car

purchaser’s

disappointed

Laurens v. Volvo Cars of North America, LLC, 868

F.3d 622, 623 (7th Cir. 2017).
Defendants’

a

Rule

12(b)(1)

This Court had previously granted

Motion

to

Dismiss

based

on

mootness

before the Seventh Circuit reversed, finding that the claims were
indeed not moot, and remanded the case.
12(b)(1)

Motion,

Defendants,

Volvo

In addition to their Rule

Cars

of

North

America,

LLC

(“VCNA”) and Volvo Cars USA, LLC (“VCUSA”), had also filed a Rule
12(b)(6) Motion to Dismiss for failure to state a claim.

Because

the Court had found a lack of jurisdiction based on mootness, it
did not reach the alternative grounds for dismissal.

The Court

now considers Defendants’ Rule 12(b)(6) Motion.
II.

FACTUAL BACKGROUND

This dispute centers on the mileage capability of the Volvo
Model XC90 T8, a plug-in hybrid sport utility vehicle capable of
being operated solely on battery power.
Khadija

Laurens,

advertisements

allegedly

issued

under

read

the

placing an order for the T8.

Plaintiffs, Xavier and
certain

of

name

press
prior

VCUSA

release
to

their

These releases stated that “at the

push of a button the driver can switch to quiet and emission-free
city driving on pure electric power where the range will be about
40

kilometers”

(Pls’

electric” mode:

Ex.

1)

and

touted

the

vehicle’s

“pure

“In this mode, when the high-voltage battery is

fully charged, it serves as the car’s sole energy source, powering
the electric motor over the rear axle.

The XC90 T8 has a range of

more than 40 km using just electricity, which covers the total
distance most people drive in one day.”
according

to

Plaintiffs’

Complaint,

(Pls’ Ex. 2.)
subsequent

Further,

Volvo

press

releases, a T8 new car brochure, and written information gained
from auto

trade

publications

all

reaffirmed

that

the

T8

under

normal driving conditions would achieve at least 40 kilometers (or
its mileage equivalent of 25 miles) on a single charge.
Exs. 3, 4, 5, and 6).

(Pls’

Plaintiffs claim that they relied on this
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information when they decided to order the T8 (which commanded a
$20,000 premium over the non-hybrid CX 90), when they made a down
payment of $1,000, and again eight months later when they paid the
$83,495.00 balance due.
T8

“both

for

the

Plaintiffs claim that they purchased the

lessened

environmental

impact

and

the

gas

new

T8,

savings.” (ECF No. 22 (“FAC”) ¶ 41.)
Unfortunately,

after

taking

possession

of

the

Plaintiffs found that it was only able to travel 8 to 10 miles on
a single electric charge.
advertised

mileage

and

Due to this discrepancy between the

the

actual

mileage

achieved,

they

were

unable to operate the car in normal daily travel without using
gasoline.
dealer

They returned the T8 to their Volvo dealer so that the

could

discrepancy.

determine

the

reason

for

the

large

mileage

The dealer initially pointed out to them that the

“sticker” on the new Volvo claimed that the T8 had only a 13-mile
electric driving range rather than the 25-mile range promised in
the advertising material.

The dealer than sought to test drive

the T8 but was only able to travel 10 miles in electric mode under
normal

driving

conditions.

The

dealer

then

tested

the

T8

by

driving at no more than 40 mph, with all safety features and the
heat turned off, and was able to achieve a distance of between 14
and 18 miles.
Based
putative

on

class

the

foregoing,

action

consisting

Plaintiffs
of

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Count

bring
I,

a

four-count

Violation

of

the

Illinois

Consumer

Fraud

Act

(the

“CFA”);

Count

II,

Common

Law

Fraud; Count III, Breach of Express Warranty; and Count IV, Unjust
Enrichment.

They bring all four counts on behalf of a national

class of buyers of the Volvo T8.

Defendants have moved to dismiss

for failure to state a claim under Rule 12(b)(6).
III.
A.

DISCUSSION

Counts I and II against Both Defendants

Defendants contend that neither the CFA nor the common law
fraud count can stand because Plaintiffs have failed to allege a
false representation.

Defendants cite Wiegel v. Stork Craft Mfg.,

Inc.,

804,

946

F.Supp.2d

810-12

(N.D.

Ill.

2013)

for

the

proposition that accurate statements cannot form the basis of a
CFA

claim.

Defendants

make

three

arguments

accuracy of their advertising materials.

concerning

the

First, they point out

that the press release in Exhibit 1 sets forth a parenthetical
phrase “NEDC driving cycle” in the paragraph immediately preceding
the

claimed

electric

driving

range,

intended to modify the distance claim.

which

they

maintain

is

Second, they point out

that their advertising states the range in kilometers rather than
miles.
located

Third, they spotlight to what they assert is a disclaimer
at

the

very

end

of

the

release,

which

reads:

“Descriptions and facts in this press material relate to VolvoCar
Group’s international car range,” and “Vehicle specifications may
vary from one country to another and may be altered without prior
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notification.”

Thus, they say, Plaintiffs were on notice that the

release really did not invite a buyer to rely on the statement
that “the range will be around 40 kilometers.”

Defendants detail

how the NEDC testing methods differ from the EPA methods, which
they claim could account for the discrepancy, and they then fault
Plaintiffs for failing to allege in their complaint that the NEDC
testing results were false.
Plaintiffs, of course, take issue with these arguments as to
why

the

advertised

representation.

40-kilometer

diving

range

was

not

a

false

They point out that Defendants ignore all of the

marketing materials that Defendants issued in the United States to
entice consumers to buy the T8.
of

these

marketing

materials

(See, Exhibits 1 through 6.)
contain

mileage

claims

All
that

Plaintiffs’ Volvo dealer was unable to come close to matching.
They also point out that it does not take a genius to convert 40
kilometers to 25 miles.
It appears to the Court at this stage of the case that the
Plaintiffs have the better of the argument on Counts I and II.
First, all of the cases Defendants cite concerning the truth of
particular

claims

were

stage or after trial.

decided

either

at

the

summary

judgment

This is particularly important here because

at this stage prior to discovery, Plaintiffs are not privy to the
NEDC testing so as to prove or disprove if and why the European T8
model - as opposed to the one available to purchasers in the
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United States - could truly go 40 kilometers without a recharge.
Further, the press releases do not state that the 40-kilometer
distance was obtained through the “NEDC driving cycle,” or even
what the NEDC driving cycle is.

This parenthetical phrase is

located in a paragraph regarding reduced emissions and does not
ever

refer

to

mileage.

Moreover,

the

so-called

“disclaimer”

statement is located at the very end of the release and refers to
the “VolvoCar Group’s international car range” without defining
what this means.

Fairly read, “international car range” appears

to refer to the fact that certain option features may not be
universally available and does not even apply at all to electric
mileage

range.

The

purported

disclaimer’s

statement

that

“specifications” vary from one country to another appears to refer
to possible variations implicated by climate and local regulations
rather

than

electric

mileage.

In

other

words,

the

disclaimer

neither contradicts nor modifies the 40-kilometer mileage claim.
Defendants also contend that the fraud and CFA counts should
be dismissed pursuant to the heightened pleading standards of Rule
9(b).

Defendants are partially correct.

While Rule 8 applies to

Count I under the CFA for unfair conduct or practices, Rule 9(b)
applies

to

Count

II,

Common

Law

Fraud.

Windy

City

Metal

Fabricators & Supply, Inc. v. CIT Tech. Financing Servs., Inc.,
536 F.3d 663, 670 (7th Cir. 2008).

Consequently, with respect to

Count I, the only question is whether “the allegations raise a
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right

to

relief

Blagojevich,
omitted).

526

above
F.3d

the

1074,

speculative
1084

(7th

level.”

Cir.

Tamayo

2008)

v.

(quotation

However, Count II requires the Rule 9(b) “who, what,

when, where, and how.”
(7th Cir. 1990).

DiLeo v. Ernst & Young, 901 F.2d 624, 627

With respect to VolvoUSA, whose name is on the

press release, Plaintiffs appear to have satisfied Rule 9(b).

For

example, VolvoUSA is the “who”; the claim that the T8 will go 40
kilometers on a single charge is the “what”; October 21, 2014, the
date of the press release in Ex. 1, is the “when”; the United
States, where the press release was published, is the “where”; and
disseminating the press release in the United States is the “how”.
However, the Complaint fails to satisfy Rule 9(b) with regard to
VCNA.

Plaintiffs claim that VCNA can be held liable because of

its corporate affiliation with VCUSA (it was VCUSA’s sole member).
However, this is not sufficient under Rule 9(b).

Goren v. New

Vision Int’l, Inc., 156 F.3d 721, 730 (7th Cir. 1998) (finding it
necessary to allege “facts sufficient to notify the defendants of
their purported role in the scheme”) (quotation omitted).
B.

Count III - Breach of Express Warranty against VCUSA

Count III alleges that, by asserting in press releases and
advertising materials that the T8 would achieve 25 miles on a
single charge, VCUSA created an express warranty that was violated
with respect to Plaintiffs’ T8.

To create an express warranty

under Section 2-313 of the Illinois Commercial Code (26 ILCS 2- 7 -

313), a seller must (1) make an affirmation of fact or promise
that (2) relates to the goods and (3) becomes part of the basis
for the bargain between the parties.

The seller warrants that the

goods will conform to the affirmation of fact or promise.

A

seller’s statement of opinion or commendation, on the other hand,
does not create an express warranty.
the

affirmation

false.

of

fact

or

promise

The difference is whether
can

be

demonstrated

to

be

Royal Business Machines, Inc. v. Lorraine Corp., 633 F.2d

34, 42 (7th Cir. 1980).

Whether a seller made a promise amounting

to a warranty is normally a question of fact.

Ibid.

Here, the

“promise” that a driver would be able to drive 25 miles on a
single charge is subject to proof and could therefore constitute
an express warranty.

If, in fact, the T8 could only achieve 8 to

10 miles, as opposed to 25, this could be considered a violation
of an express warranty, and the allegation clearly rises above the
speculative level.
C.
The

Count IV - Unjust Enrichment against VCUSA

basis

for

Defendants’

Motion

to

Dismiss

the

unjust

enrichment claim is their argument that Plaintiffs have not been
able to allege a claim under the CFA.

Insofar as the Court has

not dismissed the CFA claim, the Motion to Dismiss is denied in
relevant part.

Leiner v. Johnson & Johnson Consumer Companies,

Inc., 215 F.Supp.3d 670, 673 (N.D. Ill. 2016).

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IV.

CONCLUSION

For the reasons stated herein, the Court rules as follows:
1.

The Motion to Dismiss Count I is denied as to VCUSA but

granted as to VCNA without prejudice;
2.

The Motion to Dismiss Count II is denied as to both

Defendants;
3.

The Motion to Dismiss Count III is denied; and

4.

The Motion to Dismiss Count IV is denied.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated: November 8, 2017

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